On December 27, 2012, the Yukon Court of Appeal (YKCA) released its reasons in Ross River Dena Council v. Government of Yukon.1 The YKCA allowed the Ross River Dena Council’s (RRDC) appeal and modified the declarations granted by Veale J. of the Supreme Court.2 The decision is important, as it confirms that the Government of Yukon has a duty to consult with the RRDC in connection with the recording of a mineral claim.

Background

The appeal concerned the Crown’s duty to consult when a mineral claim is recorded under the Quartz Mining Act (Act).3

The Act establishes a "free entry" mineral tenure system, under which the Mining Recorder must record a mineral claim, without any exercise of discretion, upon receipt of an application that complies with statutory requirements. Recording a claim under the Act immediately confers on the claim holder the ability to carry out a number of exploration activities without obtaining any additional permits or approvals and without providing any notice to the Crown or First Nations. These activities, described as "Class 1" exploration programs under the Act, include the construction of camps, the storage of fuel, the clearing of land, the construction of lines and corridors and the use of explosives.

The issue then was whether a non-discretionary action by the Mining Recorder, in recording a mineral claim, triggered the Crown’s duty to consult as a result of the potential adverse impact on the Aboriginal rights and title asserted by the RRDC.

At the trial level, Veale J. held that the recording of a claim met the three-part test to determine whether the Crown’s duty to consult is triggered, as set out in Haida Nation v. British Columbia (Minister of Forests)4 (Haida) and more recently in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council (Rio Tinto): (i) the Crown had knowledge of the RRDC’s asserted Aboriginal claims; (ii) there was contemplated Crown conduct in the form of the recording of a mineral claim and (iii) there was a potential that the Crown’s conduct may adversely affect the RRDC’s claims. However, he held that the appropriate time for consultation was after the recording of the claim, and such consultation would be limited to notice of the newly recorded claims.

For an overview of the lower court decision, see our Legal Update dated November 30, 2011.

The Decision

Does the recording of a mineral claim trigger consultation?

Groberman J.A., writing for the unanimous YKCA, also applied the test, as set out in Haida and Rio Tinto, to determine whether the Crown’s duty to consult was triggered. He found that there could be no doubt that the first and third elements of the test were met. The Crown had conceded that it had knowledge of RRDC’s asserted Aboriginal claims, which claims Groberman J.A. noted were sufficiently credible. Interestingly, he found that the third aspect of the test was satisfied not only because of the potential impact of the Class 1 exploration activities on the RRDC’s asserted Aboriginal rights, but also because the mere granting of the mineral claim was a potential impact to Aboriginal title given that such title includes mineral rights.5 This latter impact to Aboriginal title had not been specifically identified by the lower court, which focused primarily on the impacts of the Class 1 exploration activities.

Groberman J.A. characterized the second element of the test as the real issue that divided the parties. He rejected the Crown’s submission that the non-discretionary nature of the recording of a mineral claim absolves the Crown of its duty to consult: "The duty to consult exists to ensure that the Crown does not manage its resources in a manner that ignores Aboriginal claims ... Statutory regimes that do not allow for consultation and fail to provide any other equally effective means to acknowledge and accommodate Aboriginal claims are defective and cannot be allowed to subsist."6 Groberman J.A. also noted that the Act is "not as devoid of discretion as the Crown suggests"8 since the Crown has broad discretion under section 15 of the Act to prohibit the location of mineral claims on particular lands.

If consultation is triggered, is the giving of notice sufficient? What consultation is required?

Groberman J.A. held that Veale J. erred in concluding that the essential nature of the free entry system limited appropriate consultation to mere notice by the Crown of newly recorded claims. In determining the appropriate level of consultation, Groberman J.A. noted the interim protection currently afforded to the RRDC pursuant to the Order Prohibiting Entry on Certain Lands in Yukon (Ross River Dena Council) (Order) made under section 15 of the Act and expiring in March 2013. A prohibition on locating claims, such as that effected by the Order, is "the most obvious method (though, perhaps, not the only method) of accommodating Aboriginal title claims."9

However, to accommodate claims to Aboriginal rights other than title, the existing statutory regime must also address the varying impact of Class 1 exploration activities. Groberman J.A. thus held that consultation must be commensurate with the extent to which the activities may prejudicially affect claimed Aboriginal rights: "where Class 1 exploration activities will have serious or long-lasting adverse effects... [t]he affected First Nation must be provided with notice of the proposed activities and, where appropriate, an opportunity to consult prior to the activity taking place. The Crown must ensure that it maintains the ability to prevent or regulate activities where it is appropriate to do so."10 Groberman J.A. addressed the possibility of implementing changes to the Act to enable the Crown to comply with this imperative. Although section 15 of the Act may allow the Crown to meet the consultation requirements in Haida by prohibiting the location of mineral claims in all areas in which exploration activities would prejudice claimed Aboriginal rights, the Crown may wish to consider other statutory mechanisms that preserve the free entry system continued under the Act. Groberman J.A., therefore, suspended the declaration of the Crown’s duty to consult beyond notice, where appropriate, for one year.

Commentary

In most Canadian jurisdictions, exploration activities similar to the Class 1 activities under the Act are not automatically granted upon the registration of a claim, but rather require additional authorizations (thereby providing opportunities for the Crown to consult with Aboriginal groups prior to any significant activities being undertaken on the land). As noted in our previous legal update, it was our view that the lower court decision should not necessarily be interpreted as standing for the general proposition that the registration of a mineral claim triggers the Crown’s duty to consult. Rather, it was a specific decision that was generally unique to Yukon as a result of the Act.

However, the YKCA’s decision may have much broader implications for free entry in other Canadian jurisdictions. This is the result of the conclusion that the mere act of locating and recording a mineral claim potentially impacts claims to Aboriginal title. While acknowledging the importance of free entry (which the YKCA called open entry) to the exploration industry, the YKCA found that constitutional duties must nevertheless be fulfilled:

"I fully understand that the open entry system continued under the Quartz Mining Act has considerable value in maintaining a viable mining industry and encouraging prospecting. I also acknowledge that there is a long tradition of acquiring mineral claims by staking, and that the system is important both historically and economically to Yukon. It must, however, be modified in order for the Crown to act in accordance with its constitutional duties."11

The principle, if it ultimately stands, that the mere recording of a mineral claim is a sufficient impact to Aboriginal title to trigger the Crown’s duty to consult would pose a serious challenge to many mining statutes in Canada, in particular in places like British Columbia.12

A related but equally critical question arising out the decision is whether government conduct for the purposes of the second element of the Haida test includes legislative action:

"I acknowledge that in Rio Tinto the Supreme Court of Canada left open the question of whether "government conduct" includes legislative action. I read that reservation narrowly, however. It may be that the doctrine of parliamentary sovereignty precludes the imposition of a requirement that governments consult with First Nations before introducing legislation (see Reference Re Canada Assistance Plan (B.C.), 1991 CanLII 74 (SCC), [1991] 2 S.C.R. 525 at 563). Such a limitation on the duty to consult would, however, only apply to the introduction of the legislation itself, and could not justify the absence of consultation in the carrying out of a statutory regime."13

In our view, the above passage is likely to attract considerable attention. The question of whether legislative action constitutes Crown conduct is a significant one and will certainly lead to future challenges by Aboriginal groups that courts will need to address.14

While the activities sanctioned by the registration of a mining claim under the Act may attract consultation, it remains challenging, in our view, how the registration of a mining claim, by itself, can impact a potential claim of Aboriginal title. If this proposition is upheld, it would be a direct challenge to the current system of free entry used throughout most of Canada.

1 2012 YKCA 142 2011 YKSC 84, [2011] Y.J. No. 1303 S.Y. 2003, c. 144 2004 SCC 73, [2004] 3 S.C.R. 5115Supra note 1 at para. 326Supra note 1 at para. 377 Ibid at para. 358 O.I.C. 2008/459Supra note 1 at para. 4910 Ibid at para. 51 (emphasis added)11Supra note 1 at para. 4312 We note that the YKCA did not analyze in any detail the nature of mineral claims or the rights acquired by the holder. Although characterized by the YKCA as a disposition of mineral rights, the tenure granted to the holder of a mineral claim is limited in many important respects. For example, it is a chattel interest under the Act and would typically only be relied upon by the holder for exploration purposes. In order to carry out commercial production, a mineral claim would typically be converted to a lease, which is a more secure form of title. Given the inherently prospective nature of mineral exploration, mineral claims would only be converted to leases in the minority of cases. As a result, the physical mineral resource in the ground is minimally impacted by the mere granting of a mineral claim and remains available in the event that a claim to Aboriginal title is later made out. In our view, this is a significant consideration in determining the level of impact on claims for Aboriginal title.13 Ibid at para. 3914 Indeed, we note recent reports of two First Nations in Alberta who have initiated a challenge to the omnibus Bills C-38 and C-45, alleging the Government of Canada has failed to meet its constitutional duty to consult in respect of such legislation.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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